Why obesity drugs may be a new blockbuster
For decades, obesity has been viewed and treated primarily as a symptom of lifestyle choices. Diet, exercise and surgery were the only options to treat the disease and its associated health risks, such as heart disease.
But with a better understanding of the root causes of obesity, it is now classified medically as a chronic condition. This shift has helped spur new research into the development of treatments, including a range of next-generation drugs to manage weight, thereby preventing diseases caused by obesity.
“We believe obesity treatment is on the verge of moving into traditional primary care management,” said Morgan Stanley analyst Mark Purcell.
That means treating obesity could quickly become one of the world’s top 12 therapies, growing from a $2.4 billion category in 2022 to $54 billion by 2030, according to Morgan Stanley Research.
“The clear precedent for investors,” Purcell says, “is the treatment of high blood pressure, which grew from a fledgling category in the 1980s to a $30 billion market in the 1990s.”
Morgan Stanley Research expects the obesity drug market to reach $54 billion by 2030.
New studies are helping to make the case for weight management as a treatment center. For example, a landmark obesity study scheduled for mid-2023 is designed to show that weight management drugs reduce the risk of heart attacks, strokes and cardiovascular death by 17% or more. .
“We expect positive data to be incorporated into US treatment guidelines no later than the end of 2023,” Purcell says. This could lead to a significant increase in the development and prescription of obesity drugs.
The growth of the sector is also based on the wider acceptance of obesity as a chronic disease, rather than a consequence of lifestyle choices. Doctors and decision-makers would then see the need to directly treat obesity, the upstream cause of many serious illnesses. Likewise, patients may be more likely to talk to their doctors about seeking treatment for obesity as drugs become available.
Currently, although more than 650 million people worldwide are clinically obese, only around 7% are diagnosed and recommended for medical treatment. In contrast, other chronic diseases, such as diabetes, have cure rates of 80-90%.
Purcell and his team believe that 25% of the patient population classified as obese will be using medication to actively manage their weight by 2035.
Along with the availability of new drugs, policies to make them affordable should also help increase both the number of people seeking treatment and the number of prescribers. In the United States, for example, policy efforts have included a bipartisan effort to expand Medicare coverage to screen for and treat obesity with FDA-approved drugs from a wide range of health care providers. specializing in obesity care.
As the market for anti-obesity and weight management drugs expands, investors should look to established large-cap pharmaceutical companies that have new drugs on trial, as well as other large-cap pharmaceutical companies. capitalization with approved treatments for cardiometabolic diseases, as these companies may seek to develop their own weight management drugs.
For more information from Morgan Stanley Research on the implications for investors of the growing obesity drug market, ask your Morgan Stanley representative or Financial Advisor for the full report, “Unlocking the Obesity Challenge: a >$50bn Market” (July 14, 2022). Morgan Stanley Research clients can directly access the report here. And more Ideas opinion leaders from Morgan Stanley.